4
Just saved $200 on closing costs by asking about a lender credit
I was looking at the loan estimate for a house in Smyrna and noticed the closing costs were way higher than I expected. My realtor told me to ask the lender if they offered a credit in exchange for a slightly higher rate, which I never would have thought of on my own. Has anyone else tried this and did it actually work out for you in the long run?
3 comments
Log in to join the discussion
Log In3 Comments
ward.diana1d ago
Right, the lender credit thing is basically free money if you do it right. I did this on my last refi and it saved me like $1,800 upfront. The trick is to make sure you're not taking a rate that's way above market, cause then you lose all the savings in interest over time. You really have to run the numbers on how long you plan to keep the loan. If you're selling or refi'ing in a couple years, a slightly higher rate with a big credit is a no brainer since you skip most of the interest pain. But if you're staying put for a decade, even a tiny rate bump adds up fast and cancels out the initial win. Your realtor gave you gold advice, most people never even know this is an option on the table.
5
rowan_ross1d ago
That $1,800 saved upfront, what rate did you end up locking in relative to what was available on the market that same week?
3
Oh man, this is like every "deal" I see at the grocery store. They put a big "SAVE $2" sticker on a pack of chicken that's normally $1.50 more than the store brand anyway. You feel smart, but you really just paid more in a different way. I did this with a car loan once, took a tiny rate bump for a cash back offer, then realized I was keeping the car for another four years. Ended up paying back three times that cash back in extra interest. It works great if you're moving fast, but people get blinded by the upfront number and forget the long math. Same with those "buy now pay later" deals, you win if you pay it off quick, you lose if you drag it out. Your realtor was right, just gotta be honest with yourself about how long you'll be sitting on that loan.
2